Average income on REPs farms up 30%

FARMERS in REPS have increased their cash surplus by 30%, according to the 2001 National Farm Management Survey.

The Survey revealed average income on REPS farms for the year was €413 per hectare, whereas income on similarly stocked non-REPS farms was €377 per hectare.

A more detailed study looked at the situation of a typical midland farmer with 40 ha (about 100 acres) in two different scenarios.

The first showed this farmer operating at a stocking level of 1.9 livestock units per hectare, with 126 cattle under in two years, qualifying and drawing both Special Beef Premia, at 9 and at 21 months.

Because of the stocking level he does not qualify for extensification premium, but he has the benefit of the increased output from the higher level of stocking.

He is not in REPS.

The cash surplus on this farm amounts to €23,436.

In the second case history, the same farmer is assessed at a lower stocking level of 1.4 LU/ha. He has 93 animals under two years old, and is claiming both the 9 month and 21 month SBP payments.

Because of the lower stocking level, he qualifies for extensification premium, and he is taking part in REPS.

The cash surplus on the farm came to €29,917.

According to Jane Kavanagh, Teagasc, “In many instances, joining REPS and reducing livestock intensity pays substantial dividends.”

“There is almost a 30% improvement in cash surplus between the two alternatives examined, which cannot be ignored. In this case, it was assumed that the investment cost necessary to comply with REPS was not very high”.

In other words, it was taken that pollution control and animal housing facilities on the farm were good and only required a modest investment.

However, it was also assumed that some investment was required in fencing, which is necessary for efficient farming in any case.

She concluded that over the five year duration of REPS, there could be a substantial income bonus for participants.

Despite the REPS payoff revealed in this independent analysis, there has been a fall out of farmers from REPS 2 over the past year.

To date, the Rural Environment Protection Scheme has been dominated by drystock farmers, who comprise 75% of those participating in the scheme so far.

Their incomes are normally at the lower end of the farming scale, and it may not follow that REPS is profitable for higher earning farmers.